Short Sales Could Carry Tax Issues Starting in January 2013 if Congress does not act.
Disclaimer – I am not an attorney or CPA. Seek your own legal and tax advice form a qualified professional.
Back in 2007 a law went into effect that helped homeowners who completed a short sale avoid paying tax on the forgiven debt (a short sale is when the seller sells for less than the mortgage money owed).
This law is slated to end at the end of 2012 so, unless extended, any short sale completed on or after January 1, 2013 will face taxes on the forgiven part of a mortgage.
Short sales often take more than three months to list and get lender approval. Sometimes, but rarely, they can be completed in less time.
As there is no guarantee Congress will act, I urge Brevard County, Florida homeowners who are considering a short sale to get their homes listed and under contract as quickly as possible.
For information on selling your home as a short sale, please send me an email or give me a call.